Law firm Amarchand Mangaldas withdraws clean chit to Kochhar

New Delhi: Law firm Cyril Amarchand Mangaldas withdrew its 2016 report that had given a clean chit to former ICICI Bank chief executive Chanda Kochhar with regard to nepotism allegations against her, sources said.

ICICI Bank in a regulatory filing Tuesday said the clean chit given to Kochhar in March this year was based on the inquiry report of the law firm which is now saying that the same should no longer be treated as valid.

Following the allegations of nepotism and conflict of interest against Kochhar, the then Chairman M K Sharma in March had expressed full confidence in her and ruled out any quid pro quo as alleged with regard to certain loans given to the Videocon group.

ICICI Bank in a filing said the bank had expressed confidence in Kochhar on the basis of the inquiry report of the law firm which was engaged in 2016 to probe the allegations of nepotism and conflict of interest against her. The inquiry was conducted by law firm Cyril Amarchand Mangaldas, according to sources.

"The law firm submitted its report in December 2016 stating that it had found no evidence of nepotism and conflict of interest on the part of Kochhar and accordingly the matter was treated as closed," ICICI Bank said. When fresh allegations surfaced in March 2018 on the same matter, the board of the bank on the basis of inquiry report of the law firm issued a statement expressing confidence in then CEO and managing director Kochhar.

Subsequent to the additional whistle-blower allegations and further information made available to the bank, the board of directors of the bank announced a fresh inquiry, which was announced on May 30, 2018.

"Further, the bank informed the law firm about the said developments, whereupon the law firm expressed that its earlier report would no longer be valid," ICICI Bank said.

Later ICICI Bank instituted an external inquiry headed by retired Supreme Court judge B N Srikrishna to look into the allegations of nepotism and quid pro quo against Kochhar.

Even as the board stood by her, details of misdoings emerged in the media, leading to a multi-agency probe against Kochhar by various law enforcement agencies.

The cases under scanner include the bank's Rs 3,250 crore loan to Videocon Group in 2012 and the involvement of Kochhar family members, including her husband Deepak Kochhar, in first sanctioning the loan and then restructuring the same.

Earlier this month on October 4, the bank had informed that Kochhar had quit the bank with immediate effect.

The board of the bank had accepted the request of Kochhar to seek early retirement.

"The board accepted this request with immediate effect. The enquiry instituted by the board will remain unaffected by this and certain benefits will be subject to the outcome of the enquiry," it had added. Following her resignations, the board appointed Sandeep Bakhshi as Managing Director and Chief Executive Officer for five years until October 3, 2023.